You have an idea for a start up that will revolutionize the world and you’re ready to jump in and sell it to the world. Not so fast. If you actually want it to be successful, take a little time and learn how to effectively start up your start-up company.
Don’t Do It Alone
You may have the entrepreneurial spirit and innate business savvy, but when starting your own company, don’t do it alone. Learn as much as you can from people who have done what you’re trying to do and have been successful. Find a mentor or counselor who can help you through the process, preferably someone who has a similar company. Get as much training as possible. Thousands of organizations help people just like you who have a vision for starting their own business but need the tools to know how to do it. Some training you can do completely online, while seminars and workshops must attended in person. If you don’t have the funds to attend organized training, just go online and research. You will find loads of information for free on various web sites.
Create a Strong Plan
Start with a strong plan if you want your company to be successful. First, brainstorm business ideas and identify the perfect opportunity for your skill sets, resources and available market. Clearly define your business objectives. Second, identify your target market. Who is going to buy your product or services and what are their characteristics? Your target market will help you determine your location. Will you have a storefront in the community where you live, a nearby city, or will you have to relocate closer to your market? Is your company going to be solely online?
With this information, you have begun to create your business plan. Business plans come in all shapes and sizes and, for a little help, you can find numerous templates and outlines online. Follow one that you feel fits your company. As you develop your business plan, you will need to determine the form of business ownership (sole proprietorship, partnership, limited liability company (LLC), corporation, S corporation, nonprofit or cooperative). Spend considerable time in the beginning crafting your business plan before you get too excited because it is the backbone of your company. Also, lenders and investors will expect a strong business plan before they will consider investing in your company.
Raise Start-up Capital
Now that you have a strong business plan, you are ready to raise capital. Hopefully, you have at least a small amount of personal funds that you can invest to give you a start. For the rest, you will have to choose between equity financing and debt financing or possibly a combination of both. If you choose equity financing, you can get a business partner who has money to invest, incorporate the company and sell shares of stock or find venture capitalists that are looking to invest in promising start-ups. If you’re lucky or if you’re starting a non-profit organization, you may even be able to raise donations. Debt financing is a completely different route you can take with various options: friends and family, credit cards, royalty financing and small business loans and grants. Research all of the types of small business loans available (specialty loans, bank-term loans, asset-based loans, and SBA-guarantee loans) and determine which is best for your company.
Make it Legal
Before you get too far, legalize your company. Don’t do it alone. Hire an attorney to ensure that you do everything correctly. You certainly don’t want to mess up the legal portion of your company. Make sure the name you have chosen is original and register it. Then, get your tax ID number. Since you have already chosen the form of ownership for your company, now make it legal. Get all the licenses and permits required for your type of company. Get business insurance as it can help you immensely in the future.
Market, Market, Market
As you develop your business plan, you should also start to develop a marketing plan. You started your marketing plan earlier when you determined your target market. Now, delve deeper into your market’s characteristics and consumer behaviors. If possible, pay for market research to get the most accurate data. The information you gather will guide you in your marketing strategies and tactics. Determine what you want the consumer to do and how you will encourage them to do it using the most effective channels and messages for them specifically. Avoid mass marketing as it will waste your money and be less effective than direct marketing. Before you start, develop a strong brand and stick to it in all of your marketing and advertising. Your potential customers need to easily recognize your company and know what they can expect from you.
Now you have a broad idea of what you will need to do to start up your start-up, but the most important thing you can do is research. Don’t just jump into the process without first having a strong backbone (business plan), sufficient capital, legal framework and a marketing plan that will bring you the business you need for success.
About the Author: Megan Freemont is a freelance writer for Adobe. Adobe provides graphic design software for individuals and companies in the graphic design industry.